Block raised its full-year gross profit outlook after a third-quarter earnings rise driven by Cash App. Shares climbed in extended trading, though credit losses grew and Bitcoin gross profit fell.
Block raised its full-year gross profit outlook on Tuesday after posting higher third-quarter earnings, helped by its Cash App unit and steady consumer spending. Shares were up 9% in extended trading.
Cash App leads the quarter
Cash App's gross profit surged 27% in the third quarter from a year earlier, while the Square merchant business rose 14%. Across the company, gross profit rose 22% year over year to $3.24 billion, the metric Block emphasizes most.
Adjusted operating income rose to $923 million, or $1.13 per share, against $480 million, or 54 cents per share, a year earlier. Crypto Briefing reported that adjusted earnings per share of $1.13 topped analyst estimates of $1.02.
Credit losses and a weaker Bitcoin line
However, the growth in banking and lending products has a cost. Block's losses on transaction, loan and consumer receivables rose 65.6% to $601.7 million in the third quarter.
Chief Financial Officer Amrita Ahuja told Reuters the company has seen strong spending on Cash App Card and strong repayment rates on Borrow, which she called signals that consumers are managing their finances.
The Bitcoin business moved the other way. Gross profit from Block's Bitcoin ecosystem dropped 50% to $52 million, which the company attributed largely to lower transaction fees on specific Cash App Bitcoin services.
Higher guidance and a first for AI revenue
Block now expects gross profit of $12.63 billion for 2026, representing 22% growth, compared with its prior forecast of $12.51 billion. It forecast fourth-quarter gross profit of $3.32 billion.
Chief Operating Officer Owen Jennings said the company expects the fourth quarter to be the first time it generates revenue directly from AI tools. The fintech firm also forecast 2027 gross profit of $14.52 billion, implying 15% growth, as it expects AI investments to drive sustained growth.
Sources: Reuters via Investing.com, Crypto Briefing
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